The minimum price you NEED to ask for your classes
Pricing a class or any product can be nerve-wracking, and the easiest path is to guess how much you should charge. And that is a very bad business strategy.
Of course, you can only charge as much as people are willing to pay, but you still must bring in a minimum amount for each class, workshop and camp to keep your doors open.
I put together a 3 Steps simple pricing strategy to give you a clear idea of how much is that minimum. Calculate everything on a monthly basis, and keep in mind this is a ballpark number that you can adjust based on the type of classes/workshop/camps you offer.
What you need to prepare to calculate:
a. Expenses - overhead (rent, salary, electricity, internet, phone, water, cleaning, office supplies, insurance, vehicle use, working capital, etc.), licenses and taxes, professional service (accounting, legal, software license, etc.), marketing (website, ads, etc.), specific to classes/workshop/camps (materials, shipping, etc.)
b. Income (not including your class prices) - renting space to others, sales of goods, income from investments, etc.
c. Hours for classes/workshop/camps - # of occurrence per month, min. students required for each, # of hours for each.
(Divide yearly expenses & income by 12)
Of course, you can only charge as much as people are willing to pay, but you still must bring in a minimum amount for each class, workshop and camp to keep your doors open.
I put together a 3 Steps simple pricing strategy to give you a clear idea of how much is that minimum. Calculate everything on a monthly basis, and keep in mind this is a ballpark number that you can adjust based on the type of classes/workshop/camps you offer.
What you need to prepare to calculate:
a. Expenses - overhead (rent, salary, electricity, internet, phone, water, cleaning, office supplies, insurance, vehicle use, working capital, etc.), licenses and taxes, professional service (accounting, legal, software license, etc.), marketing (website, ads, etc.), specific to classes/workshop/camps (materials, shipping, etc.)
b. Income (not including your class prices) - renting space to others, sales of goods, income from investments, etc.
c. Hours for classes/workshop/camps - # of occurrence per month, min. students required for each, # of hours for each.
(Divide yearly expenses & income by 12)
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USE THIS PRICING CALCULATOR TO GET THE RESULT |
Calculations:
STEP 1
|
Monthly Expenses |
-
|
Monthly Income |
=
|
NET EXPENSES |
STEP 2
|
Total Class hrs. # Classes # of hours/class min. # of students |
+
|
Total Workshops hrs. # Workshops # of hours/workshops min. # of students |
|
=
|
Total ACTIVE hours |
STEP 3
|
NET EXPENSES |
/
|
Total ACTIVE hours |
=
|
Minimum Hourly Rate |
Remember, you are looking for a ballpark minimum to know where to start when you need to price a new class, workshop or camp. You can adjust it up or even down as long as you have the average minimum or higher at the end.
Practical tip: schedule time once a week (for ex. Friday mornings) and go through your numbers: changes in # of students per class/workshop/camp, increase/decrease in money coming in, and changes in expenses. You will see what classes/workshops/camps are most profitable and you should focus on, or the ones not worth keeping.
Practical tip: schedule time once a week (for ex. Friday mornings) and go through your numbers: changes in # of students per class/workshop/camp, increase/decrease in money coming in, and changes in expenses. You will see what classes/workshops/camps are most profitable and you should focus on, or the ones not worth keeping.